India to Dispatch Investigators to Probe AgustaWestland Deal

Howard Mustoe and Robert Wall

February 16, 2013, 10:56 AM EST

AgustaWestland, the world’s second-largest helicopter maker, said it will answer bribery allegations on a $753 million helicopter deal as India’s defense ministry sends a delegation of investigators to Italy.

India will dispatch the team to Rome as early as Monday to “gather as much evidence as possible relating to the allegations of corruption in the acquisition of 12 AW101 VVIP helicopters for the Indian Air Force,” the New Delhi-based ministry said today in a statement.

India yesterday issued a so-called show cause notice to the company giving it seven days to defend itself against bribery allegations involving the deal signed in 2010. “AgustaWestland is preparing its answers to timely meet the Indian Ministry of Defense’s request,” the Finmeccanica SpA helicopter unit said in a statement.

The Indian government said it will consider canceling the deal and forcing the company to return money it had already been paid. The controversy this week led to the arrest in Italy of Giuseppe Orsi, Finmeccanica chairman and chief executive, on fraud and tax evasion charges he denies. Orsi has since been stripped of his CEO role and resigned the chairman title.

Orsi headed AgustaWestland when the deal was signed. The current chief of the Anglo-Italian unit, Bruno Spagnolini, has been placed under house arrest.

‘Full Compliance’

“AgustaWestland is confident that the full compliance with the relevant laws as well as the good conduct of its past and present Senior Executives and Managers will be demonstrated as soon as practicable,” the company said in a statement. It stressed the deal was not yet canceled.

AgustaWestland, which builds India’s AW101s at its Yeovil facility in England, has already delivered three of the helicopters to be used for presidential transport. The company was selected ahead of United Technologies Corp.’s Sikorsky unit. Russian Helicopters, which also entered the competition, was eliminated early in part because it failed to submit a required integrity report.

India may also bar AgustaWestland from further government contracts. The company is competing against Marignane, France-based Eurocopter, the world’s largest helicopter maker, and Russia’s Kamov in a deal for 197 smaller rotorcraft. The award of that contract may now be put on hold.

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